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Nike Earnings Surpass Expectations on Wall Street
September 28, 2015
A 23 percent boost in profit for the first quarter of 2016 exceeded expectations and spurred shares of Nike stock to rise 8.5 percent on Friday. Earlier Wall Street predictions of Nike revenue were that it would reach nearly $8.22 billion for the first quarter. However, increased sales of Nike products worldwide resulted in actual revenue of $8.41 billion, a five percent increase. Nike sales continue to rise globally but have demonstrated the most significant growth in two countries in particular: China and Japan.
Sales of Nike products to China totaled $866 million, an increase of 30 percent over the previous fiscal quarter. Nike sales to Japan reached $179 million, representing a 35 percent increase. North American sales increased by nine percent to $3.8 billion, primarily for Nike’s footwear products. Nike experienced an increase of 26 percent in sales to both Central and Eastern Europe combined. Sales totaled $401 million there. In Western Europe, Nike product sales reached $1.64 billion, a 14 percent increase. Finally, sales to emerging markets totaled $966 million.
The increased profit projections for fiscal first quarter 2016 were based on totals from Nike’s quarterly report for orders of its athletic footwear and apparel scheduled for delivery between September 2015 and January 2016. Total worldwide sales for that time period were nine percent higher than during the same time period one year earlier.
Other details from Nike’s quarterly report reveal that sales of wholesale unit inventories were up by eight percent. Total inventories were up 10 percent, totaling $4.4 billion. The increased inventory reflects an increase in demand for Nike footwear and apparel products. The company expects demand to continue rising in the near future.
Commenting on Nike’s positive growth, company chief executive Mark Parker described fiscal year 2016 as being “off to a great start.” In a news release, he described the major factors behind the company’s growth. “Our relentless pace of growth is driven by our strategy of putting the consumer first, obsessing innovation in everything we do and leveraging our powerful portfolio.” Parker expects things to continue in an upward direction, adding that, “We’re well-positioned to continue to deliver long-term growth that is both sustainable and profitable.”